Written by: Andrew Wandola
Edited by: Jon McDonald
Reviewed by: Christina Lewis
Cloud hosting has been around since the 1990s, but it was primarily used by big companies and enterprises in the early days. It really started gaining popularity among other demographics in 2009.
The COVID-19 pandemic supercharged cloud adoption as businesses of all sizes migrated traditional brick-and-mortar offices online to cope with the effects of a global shutdown.
As companies shifted their workforce online, cloud hosting became a top hosting solution for smaller companies and organizations. Here, we dive into the numbers to show how much cloud hosting has grown over the years and what the future holds.
1. Amazon Claims the Largest Cloud Service Market Share at 32%
Amazon Web Services dominates the cloud hosting market. In 2022, the cloud service provider made $80 billion from its cloud hosting service alone. Its closest competitor, Microsoft Azure, was well behind with a 22% cloud market share. Azure was followed by the Google Cloud Platform in a distant third with approximately 11% of the market1.
To illustrate just how entrenched the top web hosts are, here’s a breakdown of the next six cloud service providers by market share2:
- Alibaba Cloud: 4%
- IBM Cloud: 3%
- Salesforce: 3%
- Oracle Corporation: 2%
- Tencent Cloud: 2%
- IBM Corporation: (1.8%)
A closer look at the list of AWS shows it is also the preferred cloud hosting option for many enterprise organizations, including Airbnb, Heineken, Formula One, Netflix, Pinterest, Samsung, and Coca-Cola. Most of these companies make billions in profits annually, even in a bad year.
Note: Some cloud providers are more popular in certain regions than others. For example, in the Asia Pacific region, Alibaba Cloud enjoys the largest market share (36%), followed by Huawei Cloud (19%), Tencent Cloud (16%), and finally Baidu AI Cloud (9%).
2. Cloud Hosting Makes Up 15% of the Web Hosting Industry
At least 15% of websites and applications run on a cloud. Given the many benefits cloud hosting offers and the increasing shift from traditional hosting infrastructure, It wouldn’t be surprising if this percentage increases in the coming years.
Even the world’s largest domain registrar, GoDaddy, leverages cloud hosting to serve its customers. That shows a high amount of confidence in the cloud, as GoDaddy is the world’s largest domain registrar.
The company hosts more than 84 million domains, and its shift to cloud hosting shows that the winds of change are picking up across the web hosting industry3.
3. Cloud Hosting Is Expected to Grow 20% By the Year 2030
A Fortune Business Insights study recently painted a clear picture of how fast the cloud hosting industry has grown (and will grow). The report suggests that by 2030, the global cloud computing market will be worth more than $2.4 trillion4. To identify what is sparking this astronomic cloud growth, simply look around.
The internet is our second home for dating, shopping, entertainment, and education. Cloud hosting provides businesses and organizations with a scalable hosting solution for both performance and storage. That paves the way for exponential cloud growth.
4. The Cloud Industry Grew 534.9% From 2010 to 2020
The cloud computing industry has grown significantly over the last decade. In 2010, the industry was worth nearly $25 billion5. Around that time, shared hosting remained the most affordable hosting type — and it still is.
By 2020, it had grown by about 535% and was worth at least $156 billion. That’s when the COVID-19 pandemic peaked, and most businesses shifted to remote work. More entrepreneurs discovered the power of eCommerce businesses, and gamers spent more time in front of their consoles than ever. By the end of 2020, the industry’s value stood at $569 billion.
5. Cloud Hosting Brings in At Least $545 Billion in Annual Revenue
Cloud hosting contributed more than $545 billion annually to the global tech economy in 20226. For scale, that’s more than the entire mining industry brought to the US economy the same year ($483.5 billion)7.
Global cloud hosting saw approximately a 23% increase in revenue from 2021 and added more than $100 billion.
6. Public Cloud Environments (91%) are the Most Popular
Around 91% of cloud users in the corporate world use public cloud environments, primarily for their affordability8. The cost-effectiveness comes in the form of pay-as-you-go systems, meaning you only pay for what you use. You can also scale up or down depending on demand.
Businesses and organizations that want more control at a reasonable price point often choose a hybrid cloud environment. As the name suggests, this option pools resources from public and private cloud environments to provide the best of both worlds.
The popularity of public cloud environments and their flexible payment systems contribute to expert projections that the cloud hosting industry will be worth more than $623 billion by the end of 20239.
7. Cloud Hosts Store More Than 60% of Corporate Data
The cloud is home to more than half of large enterprise data10. And any industry that handles sensitive and resource-intensive data can benefit from cloud hosting.
For context, industries including banking and finance, education, healthcare, entertainment, and even retail trust cloud hosts. Many other segments have also recently shifted to the cloud. For example, the gaming industry has seen a rise in cloud hosting, especially among gamers with huge followings11. That’s because cloud hosting is more scalable, secure, and reliable than traditional bare-metal hosting.
8. 80% of Companies Spend an Average $1.2 million on Cloud Services Annually
Recent data shows that companies are investing significant amounts in cloud hosting. One study found that at least 80% of companies that use cloud hosting spend more than $1.2 million annually on the service12.
Netflix is one of the biggest consumers of AWS. Reports indicate that the company spends more than $19 million on cloud computing services each month13. In 2019, the streaming service spent more than $9 million on cloud hosting monthly.
Other large companies, including Twitch, LinkedIn, and Facebook, all spend at least $10 million monthly on cloud computing services14.
9. SaaS Accounts for 45% of Cloud Hosting Revenue
Out of the $545 billion generated by the cloud hosting industry, Software-as-a-Service applications account for at least 45% of that, followed by Infrastructure-as-a-Service at 21%. Platform-as-a-Service solutions are third, contributing 17% of global cloud hosting revenue15.
SaaS applications, including Google Workspace (formerly G Suite), Microsoft 365, Salesforce, and Slack, are among the most popular. Some of that adoption stems directly from the shift from traditional offices to remote work.
10. 75% of Business Owners Plan to Use Cloud Services By 2026
Gartner, a popular IT consulting firm, predicts 75% of business owners will invest in cloud hosting by 202616. The study notes that the future of business will evolve around customer experience, digital and business outcomes, and the virtual-first world.
That indicates companies are now prioritizing internet-based solutions over the traditional brick-and-mortar approach.
11. SMBs and Enterprises Will Spend Nearly $200 Billion on SaaS by the End of 2023
Gartner also projects that small businesses and enterprises will spend a combined $197 billion on SaaS by the end of 202316. That amounts to a 17.9% increase in spending on cloud infrastructure services alone.
According to the report, the demand for more productivity tools and the inclusion of AI and emerging technologies will also lead to more investment and innovation from SaaS providers. The increase in remote workers since the COVID-19 pandemic influences this demand as well, specifically for collaboration tools.
Final Thoughts on the Future of Cloud Hosting
Based on the data and trends, cloud hosting is on course to becoming the new face of web hosting. Gone are the days when cloud hosting catered to enterprises and Wall Street. Gamers, startups, nonprofits, website developers, and eCommerce entrepreneurs have all adopted the cloud as the new hosting touchstone.
Pay-as-you-go models coupled with hybrid options have made cloud computing services more affordable and accessible for individuals and organizations. As prices fall and more users realize the benefits of cloud hosting, it is just a matter of time before it becomes a basic need in the digital space.
Sources Used to Compile This Data:
1. https://www.statista.com/chart/18819/worldwide-market-share-of-leading-cloud-infrastructure-service-providers
2. https://kinsta.com/blog/cloud-market-share/
3. https://www.godaddy.com
4. https://www.globenewswire.com/en/news-release/2023/05/16/2669731/0/en/Cloud-Computing-Market-Size-to-Surpass-USD-2-432-87-Billion-by-2030-exhibiting-a-CAGR-of-20.html
5. https://www.statista.com/statistics/500541/worldwide-hosting-and-cloud-computing-market/
6. https://www.idc.com/getdoc.jsp?containerId=prUS51009523
7. https://www.statista.com/statistics/247991/value-added-to-the-us-gdp-by-industry
8. https://info.flexera.com/CM-REPORT-State-of-the-Cloud?lead_source=Website%20Visitor&id=Flexera.com-PR
9. https://egen.solutions/articles/19-cloud-computing-statistics-you-need-to-know-in-2023/
10. https://mb.cision.com/Public/20506/3530950/b55a39d9e52a4074.pdf
11. https://www.datacenters.com/news/the-rise-of-cloud-gaming
12. https://www.accel.com/noteworthy/accel-2022-euroscape-reset
13. https://www.sec.gov/ix?doc=/Archives/edgar/data/1065280/000106528020000155/form10qq120.htm
14. https://www.linkedin.com/pulse/biggest-aws-users-nikhil-suryawanshi
15. https://www.linkedin.com/pulse/newsflash-global-public-cloud-services-semi-annual-tracking/
16. https://www.gartner.com/en/newsroom/press-releases/2023-04-19-gartner-forecasts-worldwide-public-cloud-end-user-spending-to-reach-nearly-600-billion-in-2023
